Health Care

LabCorp To Buy Chiltern In $1.2B Deal

By Cece Nunn, posted Jul 31, 2017
Global life sciences company LabCorp is expected to acquire Chiltern, a contract research organization with North American headquarters in Wilmington, the companies announced Monday.

The acquisition depends on a definitive agreement with Chiltern’s shareholders in an all-cash transaction valued at about $1.2 billion. Once the transaction is complete, Chiltern will become part of LabCorp’s Covance segment. The combination of Covance and Chiltern will mean LabCorp can provide "leading oncology expertise" with services across all phases of drug development, company officials said in a presentation Monday morning.

“This acquisition strengthens our position as a leading life sciences company that delivers innovative diagnostics and drug development solutions to improve health and improve lives,” said David King, chairman and CEO of LabCorp (NYSE: LH), in the announcement. “Our acquisition of Covance has demonstrated the value of combining diagnostic and CRO capabilities, expertise, data and leadership. The addition of Chiltern furthers our strategy and will provide us with enhanced capabilities across a broader client base as we continue to innovate and grow.”

The all-cash transaction, which LabCorp expects to fund with a combination of bank financing and bonds, is expected to close in the fourth quarter of this year and is subject to regulatory approvals and customary closing conditions.

Asked in what way, if any, the change might affect Chiltern's Wilmington presence, Sue Maynard, vice president of corporate communication for LabCorp, said in an email, "Until the transaction closes, LabCorp and Chiltern will continue to operate as two separate companies and conduct business as usual. For the vast majority of employees, we expect to offer continued and potentially increased career opportunities."

Chiltern is one of more than 100 companies that make up the clinical research and biotechnology industry cluster in the Wilmington area, according to a report published by the N.C. Biotechnology Center. PPD, which had reportedly been a potential LabCorp acquisition earlier this year before new investors were announced in April, is the largest of the area's 30 or more CROs.

Chiltern has more than 4,500 employees around the world, including in the Asia-Pacific region, and has conducted more than 1,800 studies across 87 countries in the past five years, the release said.

According to the release, Chiltern is a leading CRO among emerging-to-mid biopharma customers, with forecasted 2017 revenue and adjusted EBITDA of about $550 million and $95 million, respectively, and a backlog of about $1 billion.

“Joining LabCorp and Covance will allow Chiltern to expand its collaborative approach to bring better, more personalized therapies to market for patients every day,” said Jim Esinhart, CEO of Chiltern. “Customers will benefit from the expanded capabilities this provides and our employees will have a greater opportunity to propel research into the future with strong, supportive partners.”

Since acquiring Covance, LabCorp has grown the CRO business to nearly $3 billion in annual revenue, said John Ratliff, CEO of Covance, in the release.

“We now join with Chiltern to create a market-leading CRO, with more than 20,000 talented employees around the world. The addition enhances Covance’s offerings as a major partner serving the top 20 biopharma segment and expands our current offering to include a dedicated focus on the high-growth emerging and mid-market biopharma segments," Ratliff said. "We are very pleased to welcome the Chiltern team to the LabCorp family as we work together to realize the promise of this unique and powerful combination.”
Ico insights


Dallas headshot 300x300

For Business Exits, Being Inconsequential Is Of Great Consequence

Dallas Romanowski - Cornerstone Business Advisors
Dan baden 300 x 300

Workshop Links Regional Seafood Startups With Global Resources

Daniel G. Baden - Marine Biotechnology in North Carolina (MARBIONC)
Burrus rob headshot 300x300

PMBA Team Wins Value Added Award for Wattles

Robert Burrus - Cameron School of Business - University of North Carolina Wilmington

Trending News

Downtown Hilton Rebranding, Undergoing $8.5M Renovation

Cece Nunn - Nov 17, 2017

Feeding Frenzy

Allison Ballard - Nov 17, 2017

Shallotte Community To Feature Solar Energy, Clean Water Systems

Cece Nunn - Nov 17, 2017

Downtown Growing Into 24-Hour Hub

Christina Haley O'Neal - Nov 17, 2017

First-Time Homebuyers Face Challenges

Cece Nunn - Nov 17, 2017

In The Current Issue

UNCW Survey To Study Economic Impact Of GenX

Economists with the University of North Carolina Wilmington are moving forward with efforts to study the effects of GenX on the regional pop...

Builder Aims To Create Apartment ‘Gems’

In a shady area surrounded by trees just off South 17th Street, builders found a real estate equivalent to a diamond in the rough. Plantatio...

In Castle Hayne, A Better Business Crop

North Carolina farmers are getting the latest in tricks of the trade and technological advances through research being conducted at horticul...

Book On Business

The 2017 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!



2017 Health Care Heroes
Major Developments
WilmingtonBiz Expo - Key Note Lunch with Keynote Lunch with Chip Mahan - 2016